Lakewood lifts grocery sales tax

Residents point to increasing gas, food costs

By Tillie Fong, Rocky Mountain News (Contact)

Published May 12, 2008 at 11 p.m.

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Starting next year, Lakewood residents will no longer have to pay a sales tax on groceries.

On Monday night, the City Council voted 10 to zero to pass an ordinance that would eliminate the sales tax on food.

The same measure would also rescind a waiver on a 1 percent sales tax increase for goods sold at Colorado Mills shopping center and Wal-Mart.

"This is a perfect example of how difficult problems can have elegant solutions," said councilman Ed Peterson. "I think it's the right thing to do for the right reasons."

Starting Jan. 1, the 2 percent sales tax on food for domestic consumption will be eliminated.

The $4 million that the city receives annually from the grocery tax will be offset by the $3 million that will be raised by revoking a 1 percent sales tax waiver granted to Colorado Mills and Wal-Mart.

In 2005, voters in Lakewood had approved a 1 percentage point increase in sales tax, raising it from 2 percent to 3 percent.

However, three new businesses at the time - Colorado Mills, Wal-Mart at Creekside and Bel Mar shopping center - were granted temporary waivers from that increase to allow time for development, with the understanding that the city could rescind the waivers at any time.

On Monday, Greg Stevinson, president of Denver West Realty Inc. and a partner with Colorado Mills, said he supported the ordinance.

"We are totally, absolutely behind you 100 percent," he told the City Council.

He noted that Colorado Mills needed the waiver after business fell off after the terrorist attacks on Sept. 11, 2001, but that since then the shopping center has been doing well, generating $365 million a year in sales.

"We have some senior citizens who need help with lower grocery prices and buying power," he said "It's time for us to work with the community and help with that."

A number of residents spoke in favor of passage of the ordinance, noting that with increasing costs of gasoline and food it has become harder and harder for many people in the community to make ends meet.

"It's a step in the right direction to help working-class people who have been having a hard time to keep up with costs," said resident Newt Vaughan, 61.

Another resident, Nancy Pontius, 46, said she is the mother of three children - two teenagers and one pre-teen.

"I spend $400 a month on food and no sign of letting up," she said, adding that the new measure would help her.

She also wondered how the city would make up the $1 million shortfall between the grocery tax revenue and the increased sales tax revenue from Colorado Mills and Wal-Mart.

"Is there is some way for residents of Lakewood to vote on low-priority budget items, if there are things that residents don't really need?" she asked.

A number of residents also expressed concern about a clause in the ordinance that would render the measure void if any part of it is challenged and a court decides that it is invalid.

But Lakewood city attorney Tim Cox said that "there was absolutely no chance" that the measure could be challenged successfully in court.

For Natalie Menten, 38, who who had worked for three years on getting the grocery tax repealed, the passage of the ordinance was long overdue.

"It's been on my to-do list for three years and I can finally check it off," she said.

But she said that although city manager Mike Rock said Monday night that Wal-Mart has indicated that it was on board with the ordinance, she noted that no representative from the company was at the meeting Monday night.

"We're going to keep our petitions just in case," she said.

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